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The Parliamentary Joint Committee on Corporations and Financial Services
(the committee) was established by the Australian Securities and Investments
Commission Act 2001 (the ASIC Act). Under Section 243 of the Act, it is to
inquire into the performance of the Australian Securities and Investments
Commission (ASIC) and to evaluate the operations of the Corporations Act and
any legislation impinging on it.
This report is presented in response to the first of these
responsibilities. In 2011 the committee raised the level of its active
oversight of ASIC through holding four hearings annually. The hearings require
ASIC officers to give evidence about the commission's execution of its duties.
The committee also decided to expand its understanding through the use of
independent expert witnesses to complement information coming from ASIC. The
intent was that these witnesses could elucidate the context in which ASIC
operates and offer different perspectives on the issues with which ASIC deals.
ASIC is the regulator of Australia's corporate sector, markets and
financial services and is responsible for monitoring the integrity of
Australia's financial system. This includes the regulation of corporations,
financial advisors and consumer credit providers, and supervision of trading on
Australia's licensed equity, derivatives and futures markets. The commission
may also advise the minister on changes required to address concerns with the
operation of the corporations legislation or the financial products or
financial services industry, or to improve the efficiency of the financial
The committee's key interest is whether ASIC is fulfilling its statutory
responsibilities as the corporate, markets and financial services regulator.
Section 1 of the ASIC Act directs ASIC to:
- maintain, facilitate and improve the performance of the financial
system and the entities within that system in the interests of commercial certainty,
reducing business costs, and the efficiency and development o the economy;
- promote the confident and informed participation of investors and
consumers in the financial system;
- administer the laws that confer functions and powers on it
effectively and with a minimum of procedural requirements;
- receive, process and store, efficiently and quickly, the
information given to ASIC under the laws that confer functions and powers on
- ensure that information is available as soon as practicable for
access by the public; and
- take whatever action it can take, and is necessary, in order to
enforce and give effect to the laws of the Commonwealth that confer function
and powers on it.
The committee's major concern is that investors have confidence in
Australian financial markets so as to attract robust investment and creative
economic activity from both large corporate players and the multitude of small
businesses and private investors that underpin the sector.
For this inquiry, in addition to taking evidence from ASIC officers, the
committee invited the Takeovers Panel to give evidence. Section 243 of the ASIC
Act authorises the committee to oversee the activities of the Takeovers Panel
in the same manner that the committee is authorised to oversee ASIC. This was the
Takeovers Panel's first appearance at an ASIC oversight hearing. The committee
thanks Panel members for their contribution.
The Takeovers Panel was established in 1991 by the ASIC Act and
re-established in 2001 under Part 10 of the ASIC Act. The Panel is responsible
for resolving disputes about a takeover bid until the bid period has ended.
The Panel's main functions are:
- making declarations of unacceptable circumstances under section
657A of the Corporations Act, and orders to remedy those circumstances; and
- reviewing decisions of ASIC to:
- exempt a person from the requirements in the Corporations Act
regarding takeover bids, or to modify the requirements; or
- exempt a person from, or modify the operations of, the
requirements in the Corporations Act regarding the provision of information
about the ownership of listed companies or managed investment scheme.
Mr Michael Dwyer
It was with great sadness that the committee heard of the passing of
Mr Michael Dwyer, a former ASIC Commissioner, on 2 March 2012. Mr Dwyer's
expertise in insolvency matters in particular was of significant benefit for
both this committee and the Economics Legislation and References Committees.
The committee extends its sympathies to Mr Dwyer's family and his colleagues at
This report records evidence given by representatives of the
Takeovers Panel and ASIC at a public hearing on 21 March 2012 in Canberra. All
witnesses are listed in Appendix 1. Copies of the Hansard transcripts from the
hearings have been tabled for the information of the Parliament, and are
available on the committee's website, www.aph.gov.au/Senate/committee/corporations_ctte/asic/index.htm
The committee placed a number of questions on notice at the public
hearing. ASIC provided answers on 11 May 2012.
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